April 2007
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Pvt equity to meet development capital requirements: Survey

Private equity is likely to emerge as a source of development capital for mid-corporates in India over the next six months, reveals a recent private equity confidence survey.

The H1 2007 Deloitte India Private Equity confidence survey, carried out by UK-based research firm Arbor Square Associates, has found 84 per cent respondents expecting an increase in private equity investment in India over the next six months.

The survey coincides with Deloitte India launching its dedicated private equity practice in India.

While 16 per cent feel that private equity investment will remain the same, none of the respondents feel it would decrease in the next six months.

“Indian companies are getting more and more global and there are also plenty of domestic growth opportunities. Therefore, there is a strong case for raising equity capital as debt can't fuel the growth alone,” the respondents said.

While they feel there could be a gradual slowdown in the next two to three years, the long-term growth prospects are very positive.

However, none of the respondents feel that buyouts or venture transactions would qualify for private equity and the most popular transaction would be development capital.

“Though there are huge growth potential we will like to pick up a minority stake initially, add value to the company and then build on it,” said Timothy Mahapatra, Deloitte, Partner Transaction Services.

Source : Zee News

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